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liable. The information reflected in the financial repot includes the measurements of assets and liabilities, the calculation of profit and capital, as well as the actual quantities involved in business activities (Ryan 1988). The information disclosed in financial statements should be fair to shareholders, public and other related stakeholders. Thus, directors and auditors in a company have an obligation to comply with the ‘true and fair value’ in all accounting activities.

For example, four particular information should be disclosed in the financial statement. These information are required to be true and fair to reflect the financial performance and position of the company. The four information needs are:capital maintenance, stewardship. Liquidity and net realizable value. From the perspective of true and fair, these four information are required as follows:

Capital maintenance need to satisfy the needs of shareholders for disclosing the annual profit legally available for dividend, retained profit and the amount and form of paid-up capital.
Stewardship need to satisfy the needs for disclosing the results achieved by directors from the use of funds and whether the investment are following the objective of the company (Power 2010).
Liquidity are quired to serve as an indication to the solvency. The information should clarify the abilities of companies to met liabilities in short term, the amount of bank overdraft and the amount of any securities to secured company’s debts (Chastney 1975).
Net realizable value disclosure are needed to make sure shareholders do not sell their shares which are parts of net realizable value but was available to the company.
Under these interpretations, the measurement of periodic profit based on detail monetary model, which elaborate the demand and actual application of how fairness reflected in the financial statement (Gaffikin, Dagwell & Wines 2004).

Moreover, all the measurements should be internally consistent and comply with the applying of the accounting System.The value of the true and fair view also reflect the compliance of the transactions with relevant regulations, statutory provision and other accounting standard. For example, the accounting policies applied in the organization should be appropriate to a accompany’s business, and the acquirements and recommendations in accounting standards can be practical in the use of achieving company’s actual financial objectives (Aisbitt & Nobes 2001). Specially, AASB 1001 requires the accounting policies should to ensure the substance of the underlying transactions or other events , satisfying the concepts of relevance and reliability (AASB). This demands the actual economic nature and effect of the events to be reported. At last, the truth and fairness also make contributions to the company’s decision making. This is because the relevance and reliability has been ensured and the managers can predict the future perspective according to the useful information reported in the financial statement (Ijiri& Jaedicke 2004).

How to define True and Fair?

However, 'True and fair' concept is not yet defined by authority, also some way to define that in view of its relationship to the various components of a true and fair. (Lee, 1982) There is also no legal concept prescribe the notion of true and fair. Sometimes the application of ‘true and fair valve’